Sprint Nextel to sell part of Midwest network following iPCS court ruling

By David Twiddy, Gaea News Network
Friday, June 12, 2009

Sprint Nextel to sell parts of Midwest network

KANSAS CITY, Mo. — Sprint Nextel Corp. said Friday it plans to sell a chunk of its cellular network in the Midwest to comply with an Illinois court decision.

The Overland Park, Kan.-based wireless provider said it is working with financial adviser Citi to find interested buyers for its Nextel-branded network in parts of Illinois, Iowa, Michigan and Nebraska.

It said the sale would have minimal effect on its financial results and customers would not see a change in service.

The sale of the network comes following a lawsuit from Schaumburg, Ill.-based iPCS Inc., a Sprint affiliate. IPCS claimed Sprint’s purchase of Nextel Communications Inc. in 2005 violated an exclusivity agreement between the companies.

A Cook County Circuit Court judge agreed and, in February, gave Sprint until Jan. 25, 2010, “to cease owning, operating and managing” the Nextel network in iPCS’ territory.

Sprint said it expected the sale to be completed before the 2010 deadline. It also said that the sale would not involve any of its Sprint-branded network, which uses a different cellular technology than that of Nextel.

iPCS didn’t immediately have a comment on Sprint’s announcement.

The two companies are also fighting over Sprint’s partnership with Clearwire Corp. to develop a high-speed wireless Internet service using WiMax technology. Sprint merged its WiMax network with Kirkland, Wash.-based Clearwire last fall.

iPCS claims the partnership violates its exclusivity agreement as well, although it agreed in November to not oppose the merger after Clearwire agreed not to offer WiMax service in iPCS’ territory before June 30.

The lawsuit is continuing, however, and iPCS has amended the suit to allege that Sprint is providing “advanced technologies” to Clearwire in violation of its affiliation agreement and will seek damages.

Sprint shares rose 21 cents, or 4 percent, to $5.29 Friday.

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